Telkom Rises on Quintet of New Directors: Johannesburg Mover

By Jaco Visser -
Dec 13, 2012

Telkom South Africa Ltd. (TKG), the
continent’s largest fixed-line phone operator, advanced the most
in almost two months after it appointed five new non-executive
directors to improve corporate governance.

Telkom rose 3.5 percent to 16.1 rand by 5 p.m. in
Johannesburg, the biggest gain since Oct. 15. The number of
shares traded was 75 percent more than the stock’s three-month
average daily volume.

“They appear to have a majority of non-executive directors
now which they didn’t have in the past,” David Lerche, an
analyst at Avior Research (Pty) Ltd., said by phone from
Johannesburg. “Telkom is in a better position regarding
governance now than they’ve been in for a while.”

The company, 39 percent controlled by the government,
appointed two non-executive directors last month in order to
meet the regulatory minimum of at least eight board members
following the resignation of its chairman and chief executive
officer in quick succession.

Management had previously clashed with the government over
how Telkom could expand into broadband and mobile markets to
offset its lower-margin fixed line business.

Susan Botha, a former executive of mobile phone operator
MTN Group Ltd. (MTN), Louis Leon von Zeuner, outgoing deputy chief
executive of Absa Bank Ltd. (ABSP), and Khanyisile Kweyama, executive
director of Anglo American in South Africa, were among the
quintet appointed, Telkom said in a statement.